 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
   Part F--General Provisions Relating to Student Assistance Programs
 
Sec. 1088. Definitions


(a) Academic and award year

    (1) For the purpose of any program under this subchapter and part C 
of subchapter I of chapter 34 of title 42, the term ``award year'' shall 
be defined as the period beginning July 1 and ending June 30 of the 
following year.
    (2) For the purpose of any program under this subchapter and part C 
of subchapter I of chapter 34 of title 42, the term ``academic year'' 
shall require a minimum of 30 weeks of instructional time, and, with 
respect to an undergraduate course of study, shall require that during 
such minimum period of instructional time a full-time student is 
expected to complete at least 24 semester or trimester hours or 36 
quarter hours at an institution that measures program length in credit 
hours, or at least 900 clock hours at an institution that measures 
program length in clock hours. The Secretary may reduce such minimum of 
30 weeks to not less than 26 weeks for good cause, as determined by the 
Secretary on a case-by-case basis, in the case of an institution of 
higher education that provides a 2-year or 4-year program of instruction 
for which the institution awards an associate or baccalaureate degree.

(b) Eligible program

    (1) For purposes of this subchapter and part C of subchapter I of 
chapter 34 of title 42, the term ``eligible program'' means a program of 
at least--
        (A) 600 clock hours of instruction, 16 semester hours, or 24 
    quarter hours, offered during a minimum of 15 weeks, in the case of 
    a program that--
            (i) provides a program of training to prepare students for 
        gainful employment in a recognized profession; and
            (ii) admits students who have not completed the equivalent 
        of an associate degree; or

        (B) 300 clock hours of instruction, 8 semester hours, or 12 
    hours, offered during a minimum of 10 weeks, in the case of--
            (i) an undergraduate program that requires the equivalent of 
        an associate degree for admissions; or
            (ii) a graduate or professional program.

    (2)(A) A program is an eligible program for purposes of part B of 
this subchapter if it is a program of at least 300 clock hours of 
instruction, but less than 600 clock hours of instruction, offered 
during a minimum of 10 weeks, that--
        (i) has a verified completion rate of at least 70 percent, as 
    determined in accordance with the regulations of the Secretary;
        (ii) has a verified placement rate of at least 70 percent, as 
    determined in accordance with the regulations of the Secretary; and
        (iii) satisfies such further criteria as the Secretary may 
    prescribe by regulation.

    (B) In the case of a program being determined eligible for the first 
time under this paragraph, such determination shall be made by the 
Secretary before such program is considered to have satisfied the 
requirements of this paragraph.

(c) Third party servicer

    For purposes of this subchapter and part C of subchapter I of 
chapter 34 of title 42, the term ``third party servicer'' means any 
individual, or any State, or private, profit or nonprofit organization 
which enters into a contract with--
        (1) any eligible institution of higher education to administer, 
    through either manual or automated processing, any aspect of such 
    institution's student assistance programs under this subchapter and 
    part C of subchapter I of chapter 34 of title 42; or
        (2) any guaranty agency, or any eligible lender, to administer, 
    through either manual or automated processing, any aspect of such 
    guaranty agency's or lender's student loan programs under part B of 
    this subchapter, including originating, guaranteeing, monitoring, 
    processing, servicing, or collecting loans.

(Pub. L. 89-329, title IV, Sec. 481, as added Pub. L. 99-498, title IV, 
Sec. 407(a), Oct. 17, 1986, 100 Stat. 1476; amended Pub. L. 100-50, 
Sec. 15(1), June 3, 1987, 101 Stat. 355; Pub. L. 101-239, title II, 
Sec. 2007(b), (c), Dec. 19, 1989, 103 Stat. 2120, 2121; Pub. L. 101-508, 
title III, Sec. 3005(b), Nov. 5, 1990, 104 Stat. 1388-28; Pub. L. 102-
26, Sec. 2(a)(2), (3), (d)(2)(A), Apr. 9, 1991, 105 Stat. 123, 124; Pub. 
L. 102-325, title IV, Sec. 481, July 23, 1992, 106 Stat. 609; Pub. L. 
103-208, Sec. 2(h)(1)-(6), Dec. 20, 1993, 107 Stat. 2475, 2476; Pub. L. 
105-216, Sec. 12, July 29, 1998, 112 Stat. 908; Pub. L. 105-244, title 
I, Sec. 101(c), Oct. 7, 1998, 112 Stat. 1617.)


                            Prior Provisions

    A prior section 1088, Pub. L. 89-329, title IV, Sec. 481, as added 
Pub. L. 96-374, title IV, Sec. 451(a), Oct. 3, 1980, 94 Stat. 1443, 
defined ``institution of higher education'' for this subchapter and part 
C of subchapter I of chapter 34 of Title 42, The Public Health and 
Welfare, prior to the general amendment of this part by Pub. L. 99-498.
    Another prior section 1088, Pub. L. 89-329, title IV, Sec. 491, 
formerly Sec. 461, as added Pub. L. 90-575, title I, Sec. 151, Oct. 16, 
1968, 82 Stat. 1032, renumbered Sec. 491 and amended Pub. L. 92-318, 
title I, Secs. 131(c), 137(b), title X, Sec. 1001(c)(3), June 23, 1972, 
86 Stat. 259, 272, 381; amended Pub. L. 95-180, Sec. 1(b), Nov. 15, 
1977, 91 Stat. 1372; Pub. L. 95-566, Sec. 6, Nov. 1, 1978, 92 Stat. 
2403; Pub. L. 96-49, Sec. 5(e), Aug. 13, 1979, 93 Stat. 352, defined 
terms for this subchapter and part C of subchapter I of chapter 34 of 
title 42, prior to the general revision of this part by Pub. L. 96-374.


                               Amendments

    1998--Pub. L. 105-244 redesignated subsecs. (d) to (f) as (a) to 
(c), respectively, and struck out former subsecs. (a) to (c) which 
defined the terms ``institution of higher education'', ``proprietary 
institution of higher education'', and ``postsecondary vocational 
institution''. See section 1002 of this title.
    Subsec. (a)(4). Pub. L. 105-216, which directed the amendment of 
par. (4), effective 1 year after July 29, 1998, by designating existing 
provisions as subpar. (A), redesignating former subpars. (A) and (B) as 
cls. (i) and (ii), respectively, of subpar. (A), and by adding subpar. 
(B) to read as follows: ``Subparagraph (A)(i) shall not apply to a 
nonprofit institution whose primary function is to provide health care 
educational services (or an affiliate of such an institution that has 
the power, by contract or ownership interest, to direct or cause the 
direction of the institution's management or policies) that files for 
bankruptcy under chapter 11 of title 11 between July 1, and December 31, 
1998.'', could not be executed because subsec. (a) did not contain a 
par. (4) subsequent to amendment by Pub. L. 105-244. See above.
    1993--Subsec. (a)(3)(B). Pub. L. 103-208, Sec. 2(h)(1), inserted 
before semicolon at end ``, except that the Secretary, at the request of 
such institution, may waive the applicability of this subparagraph to 
such institution for good cause, as determined by the Secretary in the 
case of an institution of higher education that provides a 2-year or 4-
year program of instruction for which the institution awards an 
associate or baccalaureate degree''.
    Subsec. (a)(3)(D). Pub. L. 103-208, Sec. 2(h)(2), substituted ``do 
not have a high school diploma or its recognized equivalent'' for ``are 
admitted pursuant to section 1091(d) of this title'' and inserted before 
period at end ``, except that the Secretary may waive the limitation 
contained in this subparagraph if a nonprofit institution demonstrates 
to the satisfaction of the Secretary that it exceeds such limitation 
because it serves, through contracts with Federal, State, or local 
government agencies, significant numbers of students who do not have a 
high school diploma or its recognized equivalent''.
    Subsec. (a)(4)(A). Pub. L. 103-208, Sec. 2(h)(3), amended subpar. 
(A) generally. Prior to amendment, subpar. (A) read as follows: ``such 
institution has filed for bankruptcy; or''.
    Subsec. (d)(2). Pub. L. 103-208, Sec. 2(h)(4), amended par. (2) 
generally. Prior to amendment, par. (2) read as follows: ``For the 
purpose of any program under this subchapter and part C of subchapter I 
of chapter 34 of title 42, the term `academic year' shall require a 
minimum of 30 weeks of instructional time in which a full-time student 
is expected to complete at least 24 semester or trimester hours or 36 
quarter hours at an institution which measures program length in credit 
hours or at least 900 clock hours at an institution which measures 
program length in clock hours.''
    Subsec. (e)(2). Pub. L. 103-208, Sec. 2(h)(5), amended par. (2) 
generally. Prior to amendment, par. (2) read as follows: ``The Secretary 
shall develop regulations to determine the quality of programs of less 
than 600 clock hours in length. Such regulations shall require, at a 
minimum, that the programs have a verified rate of completion of at 
least 70 percent and a verified rate of placement of at least 70 
percent. Pursuant to these regulations and notwithstanding paragraph 
(1), the Secretary shall allow programs of less than 600 clock hours, 
but greater than 300 clock hours, in length to be eligible to 
participate in the programs authorized under part B of this 
subchapter.''
    Subsec. (f). Pub. L. 103-208, Sec. 2(h)(6), substituted 
``individual, or any State,'' for ``State'' in introductory provisions.
    1992--Pub. L. 102-325, Sec. 481(a), amended section catchline.
    Subsec. (a). Pub. L. 102-325, Sec. 481(a), added subsec. (a) and 
struck out former subsec. (a) which contained pars. (1) and (2) defining 
``institution of higher education'' and ``accredited'' and par. (3) 
which related to recognition of accreditation of eligible institutions 
of higher education.
    Subsec. (b). Pub. L. 102-325, Sec. 481(b)(4), struck out at end 
``For the purpose of this subsection, the Secretary shall publish a list 
of nationally recognized accrediting agencies or associations which he 
determines to be reliable authority as to the quality of training 
offered.''
    Subsec. (b)(1). Pub. L. 102-325, Sec. 481(b)(1), substituted ``an 
eligible program'' for ``not less than a 6-month program''.
    Subsec. (b)(4). Pub. L. 102-325, Sec. 481(b)(2), substituted 
``pursuant to part G of this subchapter,'' for ``for this purpose, 
and''.
    Subsec. (b)(5), (6). Pub. L. 102-325, Sec. 481(b)(3), substituted 
``years, and'' for ``years.'' in cl. (5) and added cl. (6).
    Subsec. (c)(1). Pub. L. 102-325, Sec. 481(c), substituted ``an 
eligible program'' for ``not less than a six-month program''.
    Subsec. (d). Pub. L. 102-325, Sec. 481(d), inserted ``and award'' 
after ``Academic'' in heading and amended text generally. Prior to 
amendment, text read as follows: ``For the purpose of any program under 
this subchapter and part C of subchapter I of chapter 34 of title 42, 
the term `academic year' shall be defined by the Secretary by 
regulation.''
    Subsec. (e). Pub. L. 102-325, Sec. 481(e), amended subsec. (e) 
generally, substituting provisions relating to eligible program for 
provisions relating to impact of loss of accreditation.
    Subsec. (f). Pub. L. 102-325, Sec. 481(f), added subsec. (f).
    1991--Subsec. (b). Pub. L. 102-26, Sec. 2(d)(2)(A), repealed Pub. L. 
101-508, Sec. 3005(b). See 1990 Amendment note below.
    Pub. L. 102-26, Sec. 2(a)(2), struck out ``and who have the ability 
to benefit (as determined by the institution under section 1091(d) of 
this title) from the training offered by the institution'' before period 
at end of second sentence, and struck out at end ``The Secretary shall 
not promulgate regulations defining the admissions procedures or 
remediation programs that must be used by an institution in admitting 
students on the basis of their ability to benefit from the training 
offered and shall not, as a condition of recognition under section 
413(e) of this Act, impose upon any accrediting body or bodies standards 
which are different or more restrictive than the standards provided in 
this subsection.''
    Subsec. (c). Pub. L. 102-26, Sec. 2(a)(3), struck out before period 
at end ``and who have the ability to benefit (as determined by the 
institution under section 1091(d) of this title) from the training 
offered by the institution''.
    1990--Subsec. (b). Pub. L. 101-508, which inserted ``, except in 
accordance with section 1091(d) of this title,'' after ``shall not'' in 
fourth sentence, was repealed by Pub. L. 102-26, Sec. 2(d)(2)(A). See 
Construction of 1991 Amendment note below.
    1989--Subsec. (a)(1). Pub. L. 101-239, Sec. 2007(b)(1), substituted 
``Subject to subsection (e) of this section, for the purpose'' for ``For 
the purpose''.
    Subsec. (a)(3). Pub. L. 101-239, Sec. 2007(c), added par. (3).
    Subsec. (e). Pub. L. 101-239, Sec. 2007(b)(2), added subsec. (e).
    1987--Subsec. (c). Pub. L. 100-50 substituted ``section 1091(d) of 
this title'' for ``subsection (d) of this section''.


                    Effective Date of 1998 Amendments

    Amendment by Pub. L. 105-244 effective Oct. 1, 1998, except as 
otherwise provided in Pub. L. 105-244, see section 3 of Pub. L. 105-244, 
set out as a note under section 1001 of this title.
    Amendment by Pub. L. 105-216 effective 1 year after July 29, 1998, 
see section 13 of Pub. L. 105-216, set out as an Effective Date note 
under section 4901 of Title 12, Banks and Banking.


                    Effective Date of 1993 Amendment

    Amendment by Pub. L. 103-208 effective as if included in the Higher 
Education Amendments of 1992, Pub. L. 102-325, except as otherwise 
provided, see section 5(a) of Pub. L. 103-208, set out as a note under 
section 1051 of this title.


                    Effective Date of 1992 Amendment

    Section 498 of Pub. L. 102-325 provided that: ``The changes made in 
part G of title IV of the Act [20 U.S.C. 1088 et seq.] by the amendments 
made by this part [part G (Secs. 481-498) of title IV of Pub. L. 102-
325, enacting sections 1091b, 1092c, 1094a, 1094b, 1098a, and 1098b of 
this title, amending sections 1088 to 1091, 1092, 1092b, 1093, 1094, 
1095, 1096, 1097, and 1098 of this title, and repealing section 1096a of 
this title] shall take effect on the date of enactment of this Act [July 
23, 1992], except that--
        ``(1) as otherwise provided in such part G;
        ``(2) the changes in section 481(a) [20 U.S.C. 1088(a)], 
    relating to the definition of institution of higher education, other 
    than paragraph (4) of such section, shall be effective on and after 
    October 1, 1992;
        ``(3) section 481(e) as added by such amendments, relating to 
    the definition of eligible program, shall be effective on and after 
    July 1, 1993;
        ``(4) section 484(m)(1) [20 U.S.C. 1091(m)(1)], relating to 
    proportion of courses permitted to be correspondence courses, as 
    added by such amendments shall be effective on and after October 1, 
    1992;
        ``(5) the changes in section 485 [20 U.S.C. 1092], relating to 
    disclosures, shall be effective with respect to periods of 
    enrollment beginning on or after July 1, 1993;
        ``(6) the changes in section 488 [20 U.S.C. 1095], relating to 
    transfers of allotments, shall apply with respect to funds provided 
    for award years beginning on or after July 1, 1993; and
        ``(7) the changes in section 489 [20 U.S.C. 1096], relating to 
    payments for administrative expenses, shall apply with respect to 
    funds provided for award years beginning on or after July 1, 1993.''


                    Effective Date of 1991 Amendment

    Amendment by Pub. L. 102-26 applicable to any grant, loan, or work 
assistance to cover the cost of instruction for periods of enrollment 
beginning on or after July 1, 1991, see section 2(d)(1) of Pub. L. 102-
26, set out as a note under section 1085 of this title.


                    Effective Date of 1990 Amendment

    Section 3005(c) of Pub. L. 101-508, which provided that the 
amendments made by section 3005 (amending this section and section 1091 
of this title) were to apply to any grant, loan, or work assistance to 
cover the cost of instruction for periods of enrollment beginning on or 
after Jan. 1, 1991, was repealed by section 2(d)(2)(A) of Pub. L. 102-
26. See Construction of 1991 Amendment note below.


                    Effective Date of 1987 Amendment

    Amendment by Pub. L. 100-50 effective as if enacted as part of the 
Higher Education Amendments of 1986, Pub. L. 99-498, see section 27 of 
Pub. L. 100-50, set out as a note under section 1001 of this title.


                     Construction of 1991 Amendment

    Section 2(d)(2)(A) of Pub. L. 102-26 provided that: ``Section 3005 
of the Omnibus Reconciliation Act of 1990 [Pub. L. 101-508, amending 
this section and section 1091 of this title and enacting provisions set 
out as a note above] is repealed. Sections 484(d) and 481(b) of the Act 
[20 U.S.C. 1091(d), 1088(b)] shall be applied as if such section 3005 
had not been enacted.''


                             Need-Based Aid

    Section 1544 of Pub. L. 102-325 authorized institutions of higher 
education to voluntarily agree with other such institutions to award 
financial aid not awarded under this chapter to students attending such 
institutions only on basis of demonstrated financial need for such aid, 
and to discuss and adopt principles of professional judgment for 
determining student financial need for such aid, with exceptions for 
cases pending on July 23, 1992, and for discussions or agreements on 
prospective financial aid awards to specific common applicants, and 
provided that such authorization was to expire on Sept. 30, 1994, prior 
to repeal by Pub. L. 103-382, title V, Sec. 568(e)(2), Oct. 20, 1994, 
108 Stat. 4061. See section 568(a)-(d) of Pub. L. 103-382, set out as a 
note under section 1 of Title 15, Commerce and Trade.

                  Section Referred to in Other Sections

    This section is referred to in sections 1075, 1078, 1078-8, 1093, 
5938 of this title; title 26 sections 25A, 529; title 29 section 2204; 
title 42 sections 604, 3796d-6.
